Letters Blogatory

The Blog of International Judicial Assistance
By Ted Folkman

Jeanne Huang on Australian Information Commission v. Facebook

Friend of Letters Blogatory Jeanne Huang of the University of Sydney Law School has a report on a recent Australian case on service by email under the Hague Service Convention.

Recently, in Australian Information Commission v. Facebook Inc., [2020] FCA 531, the Federal Court of Australia (‘FCA’) addressed substituted service and the Hague Service Convention in the context of the COVID-19 pandemic. This case is important on whether defendants located in the US can be served by substituted service instead of following the Hague Service Convention.

Facts

Facebook Inc. is a company incorporated in the US (‘Facebook US’), while Facebook Ireland is in Ireland. Due to the Cambridge Analytica scandal, Facebook was fined in the US and the UK. The office of the Australian Information Commission has also investigated Facebook over the scandal since April 2018 and haled Facebook into the FCA on 9 March 2020.1The dispute centred on the ‘This is your digital life’ App (hereinafter ‘APP’). It was a personality quiz designed by Dr.
Aleksandr Kogan who later established the Global Science Research Limited (GSR). The Graph API V1 developed by the respondents allowed the App to request information from the Facebook accounts of 305,000 Facebook Users globally who installed the APP, of which approximately 53 were Australian. The Graph API also allowed the App to request the personal information of approximately 86,3000,000 Facebook Users globally (approximately 311,074 of whom were Australian Facebook Users) who were friends of the installers (that is, they did not install the App themselves). Dr. Kogan and/or the GSR further disclosed the personal information it obtained from the Respondents to third parties, including the Cambridge Analytica Ltd, and/or its parent company, for profit. The Commission alleged that Facebook Inc. and Facebook Ireland breached § 13 G of the Privacy Act (Cth) from 12 March 2014 to 1 May 2015.

Both defendants appointed King & Wood Mallesons (‘KWM’) to respond to the Commission’s inquiries before the FCA proceeding was initiated. On 6 March 2020, the Australian Government Solicitor (‘AGS’) asked KWM whether it had instructions to accept the service of originating process. KWM replied that it acted for the respondents but was not instructed to accept the service on their behalf. It also indicated that it had instructions to discuss the substantive issues raised in the proceeding.

Consequently, the Commission sought orders under Federal Court Rule (‘FCR’) 2011 rr 10.42 and 10.43(2) for leave to serve Facebook US and Facebook Ireland (1) through the central authorities according to Article 5 of the Hague Convention and (2) by substituted service under r 10.24. With respect to the latter, the proposed substituted service was to serve the respondents by emailing the judicial documents to the named persons at KWM and the Head of Data Protection and Privacy and Associate General Counsel at Facebook Ireland.

Ruling

On 22 April 2020, the FCA rendered a judgment favourable to the Commission granting both leave to serve outside Australia and the order for substituted service.

Leave to serve outside Australia was granted pursuant to FCR 2011 rr 10.42, 10.43(2) and (4). The rationale for this was manyfold. First, the court held that, vested by the Parliament under of the Privacy Act (Cth), it had original jurisdiction in the proceeding. Second, as the proceeding was related to the construction, effect or enforcement of the Privacy Act, it fell into pigeonhole 14 of r 10.42. Third, the Commission established a prima facie case for the reliefs claimed in the proceeding. Moreover, the proposed method of service via the central authorities in the US and Ireland complied with Article 5 of the Hague Convention. Therefore, the court granted leave for service outside Australia.

Regarding substituted service, the court invoked FCR 2011 r 10.24 in agreemenet with the Commission and granted the order for substituted service for two reasons.

First, in circumstances where the pandemic was declared by the World Health Organisation and is directly affecting the US, it is not presently practicable to effect service on Facebook US pursuant to Article 5 of the Hague Convention. ABC Legal is the contractor for the US Department of Justice, Civil Division, and the Office of International Judicial Assistance. It is in charge of serving foreign process on private individuals and companies in the US under the Hague Convention. However, due to the COVID-19 pandemic, ABC Legal has ‘suspended service of process nationwide’ across the US according to its website. Consequently, the FCA considered that it was substantially difficult for the Commission to effect service on Facebook US pursuant to Article 5 of the Hague Convention. On the other hand, despite the pandemic also affecting Ireland, the court acknowledged that Ireland’s High Court and postal services remained operative.2Hague Service Convention website page relating to Ireland describes the prescribed methods as ‘[p]ersonal or by post.’ Ireland permits service of the court documents on individuals and entities in Ireland (e.g. Facebook Ireland) by post under the Hague Convention. Nevertheless, the court held that ‘it is impracticable to do so in the rapidly changing and evolving environment caused by the current pandemic; the present situation may have changed by the time service in the relevant way would be sought to be effected’.3Facebook [71].

Second, the proposed method of substituted service by email was likely to bring the proceeding to the attention of the respondents. This was because the respondents are aware of this proceeding. Moreover, in representing the respondents, the named individuals at KWM in Sydney and the Facebook Head of Data Protection and Privacy and the Associate General Counsel in Ireland replied to the Commissioner’s inquiries which led to this proceeding. Therefore, substituted service was ordered and the Commission was allowed to email judicial documents to these individuals.

Comments

Regarding substituted service, the Facebook judgment provides:

This Court has held, in circumstances analogous to the present, that an order for substituted service may be made under either r 10.24 or r 10.49 : Commissioner of Taxation v. Zeitouni, (2013) 306 ALR 603 at [60] (Katzmann J); see also: Australian Competition and Consumer Commission v. Kokos International Pty Ltd., [2007] FCA 2035 at [18] (French J); Commissioner of Taxation v. Oswal, [2012] FCA 1507 at [32] (Gilmour J). Even if that position is incorrect, I would have ordered substituted service under r 10.49, with a dispensation from the implicit requirement to attempt service under r 1.34, for equivalent reasons to those for which I will order substituted service under r 10.24, explained next.

Here, the court’s reasoning is dubious in three respects.

First, all the three cases cited above are not factually analogous to Facebook. Whilst the service of process in Facebook was subject to the Hague Convention, the cases of Zeitouni, Kokos, and Oswal were not. Specifically, this was because Zeitouni4Zeitouni, [65]. There was no dispute that the Commissioner did not know the address(es) of the defendants. Though presumably in a position to provide information of the whereabouts of the defendants, their lawyers refrained from doing so. The Australian Federal Police had been looking for one brother who was in Indonesia for six months without success. For the other brother, the Commissioner only knew he was not in Australia but did not know where he went. and Kokos5Australian Competition & Consumer Commission v. Kokos International Pty Ltd. [2007] FCA 2035, [18]. Although ACCC knew that the defendant was likely in Japan, it had been unable to obtain an address at which he could be served. Neither the defendant nor his solicitors would provide an address for service. The Department of Foreign Affairs and Trade and Australia Embassy in Japan were unable to make enquiries on the ACCC’s behalf. Therefore, the plaintiff could not make an attempt to serve the defendant in Japan. The court held that service was not practical, and a substitute service was granted under ord 7 r 9 of FCR 1979. were instances where the defendants’ addresses were unknown; in Oswal, the court noted that it was unaware of who might be present at the address to accept service on behalf of the defendant.6Oswal, [35]–[36]. Mrs. Oswal was not in Australia. Her last known address was in the UAE, but she is also an Indian national and has business interests in Singapore. Consequently, it is not possible to know with certainty her whereabouts to effect personal service. Article 1 of the Hague Convention explicitly indicates that these are circumstances where the Convention is not applicable.7Hague Service Convention art. 1. Therefore, these three cases can be distinguished from Facebook. This differentiation is insurmountable due to the crucial application of the Hague Convention’s ‘non-mandatory but exclusive’ nature that informs service.8Hague Conference on Private International Law, Practical Handbook on the Operation of the Service Convention, ed. Christophe Bernasconi and Laurence Thébault (Wilson & Lafleur, 2006) [24]-[41]. That is, service in Convention states must be conducted in a method permitted by the Convention. When the Convention is applicable, as in Facebook, the attempt requirement of r 10.49 should not be lightly dispensed with unless the rare instance under r 1.34 is satisfied.

Second, in Facebook, it is unclear what warrants the court to invoke the rare instance of r 1.34 in disregarding the usual attempt requirement contemplated in r 10.49—namely, that service according to the Hague Convention should be attempted first and when it had not been successful, substituted service may be applied. There is a long-standing legal doctrine holding that substituted service should not be used to extend the court’s jurisdiction in the absence of any other power to do so. In Laurie v. Carroll, the High Court of Australia held that substituted service should not be used to replace personal service if the defendant was out of the jurisdiction when a writ was issued. In Facebook, there is no real urgency for service because the claim centered on the defendants’ conducts in 2014 and 2015. Cambridge Analytica is bankrupt. The Commission did not produce any evidence substantiating that Facebook US and Facebook Ireland are currently continuing their violation of the Privacy Act (Cth) in Australia. There is also no evidence showing that the two defendants may move their assets outside of Australia or that any third party should be joined swiftly. Although COVID-19 may lead to uncertain proceeding delays, this reason alone is unlikely to justify the substitution of the Hague Convention. This is because Australia has a treaty obligation to serve foreign defendants in a Convention state according to the ‘non-mandatory but exclusive’ nature of the Convention. This obligation cannot be dispensed with in a proceeding that is not time sensitive. Moreover, a delay of proceeding is distinct from the urgency of proceeding contemplated in r 1.34, as per Swan Brewery Co. Ltd. v. Atlee. In this case, the defendant was in the Philippines, where service through diplomatic channels could take six months or considerably more. Evidence also demonstrated that ‘the authorities in the Philippines [would] not assist with service via the diplomatic channel’. In contrast, private service could be affected within 48 hours. The plaintiff applied for an order to serve a sequestration order by post, which was rejected by the court; while the utilisation of the diplomatic channel was impractical, it was not established on the evidence that personal service was not impractical. Similarly, in Facebook, although the ABC Legal Service in the US was not functioning, there was no evidence showing that the US postal service was not operational. The COVID-19 pandemic’s effect in delaying the proceedings cannot justify the dispense of the attempt requirement in r 10.49 alone.

Third, more evidence is necessary to demonstrate that rr 10.24 and 10.45 are satisfied in Facebook. Where Ireland’s High Court and postal services remain operative even during COVID-19 pandemic, it is still possible to serve Facebook Ireland in accordance with Hague Convention. The Facebook judgment does not specify what evidence should be provided by the plaintiff in order to prove that it is not sensible or realistic to effect service according to the Convention in Ireland. The court described how the environment is ‘rapidly changing and evolving’ due to the pandemic.9Facebook [66]. Yet, it seems that the court deemed that the environment would be worse off and even further aggravate service, as the court considered that the current service provided by the High Court and the post in Ireland might be changed. However, the court’s view may be inaccurate with regards to the trend of the pandemic in Ireland where the curve of confirmed COVID-19 cases has flattened, thereby indicating a realistic possibility that the environment may recover, not worsen. Further, whether the court considered the ‘rapidly changing and evolving’ environment of the pandemic is doubtful. This is a significant line of inquiry as the question of ‘being not practical’ should be determined by ‘whether at the date on which the application regarding service is made, the applicant, using reasonable effort, [was] unable to serve the respondent personally (emphasis added).’[enf_note]Foxe v. Brown [1984] HCA 69, [547] as applied in O’Neil v. Acott, (1988) 59 NTR 1, 2.[/mfn] Last but not least, the mere fact that Facebook was aware of the proceeding cannot suffice to satisfy the requirement of ‘not practicable’ in r 10.24.10Morris v McConaghy Australia (No 4), [2018] FCA 1516, [16]. The second defendant, MC2, was in the Cayman Islands. There was no dispute that MC2 was aware of the originating process and had notice of the relevant court documents. However, the court required that the service must be conducted under the Hague Convention because the mere fact that the document has been brought to the attention of the party being served cannot suffice to satisfy r 48(a) (i.e. the requirement of ‘not practical’). Therefore, the court’s reasoning that it is not practical to serve Facebook Ireland by forecasting the future change does not seem persuasive.

In conclusion, substituted service in Facebook was granted too lightly.

  • 1
    The dispute centred on the ‘This is your digital life’ App (hereinafter ‘APP’). It was a personality quiz designed by Dr.
    Aleksandr Kogan who later established the Global Science Research Limited (GSR). The Graph API V1 developed by the respondents allowed the App to request information from the Facebook accounts of 305,000 Facebook Users globally who installed the APP, of which approximately 53 were Australian. The Graph API also allowed the App to request the personal information of approximately 86,3000,000 Facebook Users globally (approximately 311,074 of whom were Australian Facebook Users) who were friends of the installers (that is, they did not install the App themselves). Dr. Kogan and/or the GSR further disclosed the personal information it obtained from the Respondents to third parties, including the Cambridge Analytica Ltd, and/or its parent company, for profit.
  • 2
    Hague Service Convention website page relating to Ireland describes the prescribed methods as ‘[p]ersonal or by post.’ Ireland permits service of the court documents on individuals and entities in Ireland (e.g. Facebook Ireland) by post under the Hague Convention.
  • 3
    Facebook [71].
  • 4
    Zeitouni, [65]. There was no dispute that the Commissioner did not know the address(es) of the defendants. Though presumably in a position to provide information of the whereabouts of the defendants, their lawyers refrained from doing so. The Australian Federal Police had been looking for one brother who was in Indonesia for six months without success. For the other brother, the Commissioner only knew he was not in Australia but did not know where he went.
  • 5
    Australian Competition & Consumer Commission v. Kokos International Pty Ltd. [2007] FCA 2035, [18]. Although ACCC knew that the defendant was likely in Japan, it had been unable to obtain an address at which he could be served. Neither the defendant nor his solicitors would provide an address for service. The Department of Foreign Affairs and Trade and Australia Embassy in Japan were unable to make enquiries on the ACCC’s behalf. Therefore, the plaintiff could not make an attempt to serve the defendant in Japan. The court held that service was not practical, and a substitute service was granted under ord 7 r 9 of FCR 1979.
  • 6
    Oswal, [35]–[36]. Mrs. Oswal was not in Australia. Her last known address was in the UAE, but she is also an Indian national and has business interests in Singapore. Consequently, it is not possible to know with certainty her whereabouts to effect personal service.
  • 7
    Hague Service Convention art. 1.
  • 8
    Hague Conference on Private International Law, Practical Handbook on the Operation of the Service Convention, ed. Christophe Bernasconi and Laurence Thébault (Wilson & Lafleur, 2006) [24]-[41].
  • 9
    Facebook [66].
  • 10
    Morris v McConaghy Australia (No 4), [2018] FCA 1516, [16]. The second defendant, MC2, was in the Cayman Islands. There was no dispute that MC2 was aware of the originating process and had notice of the relevant court documents. However, the court required that the service must be conducted under the Hague Convention because the mere fact that the document has been brought to the attention of the party being served cannot suffice to satisfy r 48(a) (i.e. the requirement of ‘not practical’).
Ted Folkman
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5 responses to “Jeanne Huang on Australian Information Commission v. Facebook”

  1. Ian (D. Withers)

    Interesting report, appreciated.
    Could this be interpreted as usable on a wider geographical basis, service of process overseas by mail in view of covid-19?

    Reply
    1. Ted Folkman

      I am curious for Jeanne’s views on this. My thought is that COVID-19 doesn’t change the basic rule, which is that a method must be authorized or permitted by the Convention and authorized by the law of the forum.

      Reply
  2. Ted Folkman

    Jeanne, thanks for this report! It is not too common to see cases questioning the validity of methods of service in the United States in cases pending abroad, because we are so liberal regarding methods of service generally. The United States has not objected to service by any of the alternative channels permitted by the Convention. Thus perhaps it would have been simpler and less subject to criticism just to send the summons to Facebook by postal channels, assuming that Australian law would permit that method of service.

    My view on service by email has softened over time. Of course, service by email is never permissible in countries that have objected to service under Article 10(a) of the Convention, because if any provision of the Convention permits service by email, it is Article 10(a), on the theory that email is the functional equivalent of the traditional post. So in countries like the United States that have not objected to service under Article 10(a), the question is whether it is fair to treat private email as within the definition of “postal channels.” While I still think the better view is that ordinary private, commercial email is not within the postal channel because it does not involve any officials of the sending state or the receiving state, I see the advantages of the contrary argument. The main advantage is avoiding freezing the Convention in the past as the world moves towards the use of electronic means for even the most important communications. And the consensus view has long been that private courier services such as FedEx are within the postal channel for purposes of the Convention, though there it is possible, at least in the United States, to construct an argument based on the statutes authorizing private courier services as an exception to the ordinary government monopoly on postal service.

    I would also point out that the typical American solution to the problem the case presents is to say that the Convention does not apply, because service by email on a foreign litigant’s lawyer in the forum state does not involve transmission of a judicial document abroad. This raises textual difficulties in the United States, since under FRCP 4(f)(3) a court may authorize alternate methods of service only when the service is to be made outside a judicial district of the United States. I defer to Australian lawyers as to whether there is a similar problem under Australia’s civil procedure law.

    Reply
  3. Aaron Lukken

    I’ve been trying to wrap my head around this thing for days (Jeanne’s article was highlighted by conflictoflaws.net in its Sunday digest). And maybe I’m oversimplifying here, but I just don’t see how the Hague Service Convention applies to this matter at all.

    It’s not a civil or commercial matter. Based on my limited knowledge if the case, it seems to me that it’s an administrative or quasi-criminal matter, which puts service outside the Convention.

    A rough analogy is the refusal by some German states to serve documents in cases involving punitive damages in split-recovery jurisdictions here in the U.S. It’s not an implausible argument to say that where the state takes action to punish a defendant, it’s no longer a civil or commercial case.

    Perhaps I’m just missing how this constitutes a civil matter.

    Reply
    1. Ted Folkman

      Interesting, Aaron! I think, though, that in light of the discussion in ¶ 58 of the Practical Handbook (4th ed.), it wouldn’t be surprising if Australia, a common law country, treated the matter as civil or commercial.

      Reply

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